Similar to energy, real estate is asset-intensive and a company’s value depends on how much cash flow specific properties generate. – You look at Price / FFO (Funds From Operations) and Price / AFFO (Adjusted Funds From Operations), which add back Depreciation and subtract gains on property sales; NAV (Net Asset Value) is also important. …
You use the same methodologies, except: – You look at industry-specific multiples like P / MCFE and P / NAV in addition to the more standard ones. – You need to project the prices of commodities like oil and natural gas, and also the company’s reserves to determine its revenue and cash flows in future …
There’s no “rule” that says this is wrong or not allowed, but it can be misleading to compare companies with dramatically different margins. Due to basic arithmetic, the 40% margin company will usually have a lower multiple – whether or not its actual value is lower. In this situation, we might consider screening based on …
Usually you look at the TTM (Trailing Twelve Months) period for both sets, and then you look forward either 1 or 2 years. You’re more likely to look backward more than 1 year and go forward more than 2 years for public company comparables; for precedent transactions it’s odd to go forward more than 1 …
1. Search online and see if you can find press releases or articles in the financial press with these numbers. 2. Failing that, look in equity research for the buyer around the time of the transaction and see if any of the analysts estimate the seller’s numbers. 3. Also look on online sources like Capital …
This varies by bank and group, but two common methods: 1. You pick the report with the most detailed information. 2. You pick the report with numbers in the middle of the range. Note that you do not pick reports based on which bank they’re coming from. So if you’re at Goldman Sachs, you would …